How Your Brain Corrupts Your Shopping Choices

Ever come home from a day of shopping and wondered why on earth you purchased certain items? Turns out our brains can corrupt our shopping choices to the point where we barely know what we're doing. Here's what's happening and what you can do about it.

We've talked about the stupid things you do when shopping before, but those bad habits are just part of the problem. The other big issue? You have cognitive biases that sabotage your decisions, resulting in purchases of items you may not even really want. Let's dig into a few of the worst ways your brain corrupts your choices when you're shopping.

Confirmation Bias Causes Waste

Confirmation bias is a well-understood but often-ignored phenomenn. You believe your opinion is based on years of objective analysis, right? In reality, your opinion is nothing more than a collection of information you choose to pay attention to. Confirmation bias occurs when you only absorb information that conforms with your existing beliefs and you discount everything else. It's the reason hard-line Republicans in the US watch Fox News while life-long Democrats watch MSNBC. Confirmation bias has just as much impact on your shopping choices. As financial blog The Simple Dollar points out, confirmation bias is used by advertisers all the time to affect your decisions:

Let's say you've seen repeated advertisements and product placements that convince you that a particular product is really cool. You go into a store, see it on a well-designed display, and find yourself really wanting this item you don't need. You sigh, decide that you can probably afford it, and head to the checkout aisle.

It's not just gadgets that trigger your confirmation bias. Take the common cold as an example. As we've pointed out before, most "alternative" treatments for colds, such as Vitamin C and zinc, don't have any measurable effect. People still believe they work because they've been told that for most of their lives. You end up wasting money on something with no proven benefit because you're unwilling to accept evidence to the contrary.

Confirmation bias can cause you to narrow your research and only consider results that reaffirm your existing views. to your previous opinion. To counter it, keep an open mind and research a variety of sources. If the data tells you you're wrong, accept it and find another product.

The Decoy Effect Confuses You

We've discussed decoy pricing in the past, and it remains one of the most insidious marketing tricks. The basic idea? You're presented with two choices, a cheap product and a high-priced package with all the bells and whistles. The main purpose of the expensive option is to drive you towards the cheaper deal.

When Williams-Sonoma first introduced a home "bread bakery" machine (for $US275), most consumers were not interested...Flustered by the poor sales, the manufacturer of the bread machine brought in a marketing research firm, which suggested a fix: introduce an additional model of the bread maker, one that was not only larger but priced 50 per cent higher than the initial machine...Sales began to rise, though it was not the large bread maker that was being sold...people didn't have to make their decision in a vacuum. They could say: "Well, I don't know much about bread makers, but I do know that if I were to buy one, I'd rather have the smaller one for less money."

The decoy effect can also be more subtle, as we noted in our earlier discussion:

Consumers offered a choice between (for example) a $59 Internet-only subscription and a $125 print subscription will generally opt for the Internet-only option. If, however, there’s a choice between a $59 Internet-only, a $125 print-only, and a $129 print and Internet combined, more people will choose the priciest option. The $125 middle ground exists to make the $129 deal look cheaper by comparison, not as a serious choice.

In most cases, a little bit of research on a product can counteract the decoy effect. It's also important to ask yourself if you're purchasing something you actually want, or if you're just buying it because you think you should. Photo by Intel Free Press.

Hyperbolic Discounting Makes You Buy Items Right Now

Hyperbolic discounting is a bias that we've probably all fallen for quite consciously. Essentially, hyperbolic discounting is when you choose the "right now" option over a cheaper but slower alternative.

Imagine you're standing in a store and you see that a piece of software you want is 25 per cent off. You know you can order it online for 50 per cent off, but you don't want to wait. You want it right now, so you buy it from the store at the higher price.

Fortunately, this is a bias you can really fight against. If you start properly comparing prices before you're actually in a store, you'll know what your options are. If you check store prices online, you can even potentially save yourself making that trip. Photo by Roger Price.

Restraint Bias Confirms Your Delusions Of Control

Restraint bias is when you overestimate your ability to control impulsive behaviour. You believe you can control your impulses all the time when in fact you're terrible at it. On its own restraint bias is just an annoying quirk of your brain, but when it's coupled with shopping it means you're more likely to buy things on a whim than you think you are.

So, let's say you walk into an Apple store, because you want to "just check out" a new iPad. You believe that you have the self-control to not actually buy one, but when you get there and start playing with it you convince yourself to buy it on an impulse. (Gizmodo editor Luke Hopewell did just this when the iPad Mini was released.)

You tell yourself you'll do it "just this once". Later that day, you head to the supermarket and in the checkout queue you start flipping through New Idea. You decide to buy it "just this once" because you never succumb to your impulses. And so on, and so on.

The easiest way to fight against restraint bias is to not put yourself in situations where you're challenging your self-control. While you can boost your self-control with practice, it's best to not believe you're in control in the first place and stay away from those situations. Photo by Gord Webster.

Anchoring Locks In Your Beliefs

Anchoring is a bias where you rely on the first piece of information you see to set the standard for all the information that follows. For example, if you see that Apple sells its iPad for $539 then you believe that's a fair price for all tablets. In fact, we usually have no idea what a product is worth, and the first company that throws out a number sets the standard for everything else.

You walk into a high-end store, let's say it's Hermès, and you see a $7000 bag. "Haha, that's so stupid!" you tell your friend. "Seven grand for a bag!" Then you spot an awesome watch for $367. Compared to a Timex, that's wildly over-expensive. But compared to the $7000 price tag you just put to memory, it's a steal. In this way, stores can massage or "anchor" your expectations for spending.

Anchoring works in almost any type of shopping experience, from housing to everyday supermarket goods. The worst part? Anchoring is really hard to avoid even when you know you're doing it. As with most of these biases, the best thing you can do is acknowledge it exists and challenge your thought process as often as possible. Photo by Jason Meredith.

Choice-Supportive Bias Throws You With Nostalgia

Choice-supportive bias is when you only remember the positive attributes of a choice you made in the past. It's part of the explanation behind brand loyalty, and whether you realise it or not, it colours every future decision you make in a bad way.

Imagine you've worn Converse shoes since childhood, and you continue to purchase them despite the fact they don't seem to last as long as they used to. Your nostalgia for that original purchase, combined with how your memory is blinded by choice-supportive bias, causes you to keep buying those same shoes. Even though you're consistently disappointed with them, you only remember the positive qualities when you shop.

The only real way to fight this is to get yourself out of the rut of purchasing the same products, try out different brands, and research other options. Photo by Jacob Bøtter.

Perhaps the most interesting thing about our biases is how they all work together to sabotage our basic thinking and decision-making skills. The worst part is that collectively we believe we don't have these biases to begin with. Fight against that belief and you're less likely to make poor shopping choices.

Comments

Dan Zammell Guest

Dec 14, 2012, 7:40am

Great article.
There are a few other techniques to consider,
- different sizes or quantities can influence you to buy more
- colouring or style of packaging can influence you to buy more
- items put in front of you at eye level gain greater attention than those that aren't (product placement)
- Shopping when hungry usually influences you to buy more (but that's self-inflicted)
- Scam schemes (like fly buys) can influence you to buy more*

* my father is usually very good with his money. However, one time he bought two packets of tic-tacs at a shell petrol station so that he would get his fly-buy points. Back then, $50,000 of spending would get you a shiny toaster with Flybuys (Scambuys), so that his one purchase of tic-tacs went a long way to blowing any potential benefit. Needless to say, I strongly suggested he dump Scambuys back in the early days.

While I'm just as prone to falling for marketing 'tricks' as the next gullible fool, I drew the line at Flybuys and allowed simple logic and arithmetic to knock that one on the head based on the worst apparent ROI (return on investment) since... forever. Even with the revamped scheme, my feeling is that I'd rather be manipulated through weekly 'specials' than encouraged to shop based on reward card affiliation.

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